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Landlord looks to reduce car ownership by buying a shared car for its tenants

Posted by on May 23rd, 2014 at 9:53 am

shared car division
The shared car at 3330 SE Division Street is marketed to UDP residents but rentable by anyone.
(Photo by M.Andersen/BikePortland)

Real Estate Beat is sponsored by Portlandia Home

The local developer and landlord that in 2011 reintroduced zero-auto-parking-apartment buildings to the city after a 60-year absence is seeing success with another innovation: it’s bought a car for its buildings’ residents to share.

Urban Development Partners, whose Move the House Apartments project at 38th and Division inspired dozens of copycats around the city, says the car, a 2012 Subaru Forester that UDP has shared using the Getaround peer-to-peer carsharing service, is covering its own costs and seems to be helping motivate UDP tenants to give up their cars.

The car rents to anyone, whether or not they’re a UDP tenant, for $5 per hour or $35 per day, plus gas and a $1 transaction fee. Just as other car-sharing companies such as Zipcar do, the developer pays the city a few hundred dollars per year for a reserved parking space directly in front of the 35-unit building at 3330 SE Division St.

UDP spokeswoman Neely Wells said this week that since the car went online last winter, three new tenants have said it was a “key reason” they chose the unit, and that four households that moved into the building with two cars have sold one of their two.

Wells says the company’s goal is to free up parking spaces in a crowded neighborhood while providing an amenity that helps their tenants save money. One-bedrooms at 3330 SE Division average $1395. There are zero vacancies.

“We’ve always wanted to be in a high-transit area where people were using public transportation, walking, riding bikes,” Wells said. “And we struggled for a couple years on how we could actually affect the number of cars in the neighborhood. … We feel the parking pain. our neighbors talk about it frequently. Our tenants talk about it. We’re concerned on behalf of our retailers.”

Wells said about 2/3 of the tenants at 3330 currently own cars.


Wells said Getaround’s local manager, Steve Gutmann, was essential in making the deal happen.

“Steve was just phenomenal in figuring out what the hoops were,” Wells said. “Our insurance agency was like, ‘You can’t do that. that’s impossible. And then Getaround got on the phone and explained whatever it was they explained. and they said, ‘OK!’”

Getaround is a California-based startup that essentially allows anyone to turn their car into a Zipcar. It makes money by collecting part of the cost of each transaction. Insurance is included in user fees, so a Getaround driver doesn’t need to have outside insurance. The company launched in Portland in 2012 and currently offers the most shared vehicles of any local carsharing service.

Neely said UDP has marketed the car by offering a $25 voucher to tenants at move-in, by posting marketing materials in their Division Street buildings and inviting commercial tenants and their employees to use it, too. Neely said it currently gets reservations about four days a week, which is enough to cover its depreciation, maintenance and parking costs.

Across the street at 3360 Division, a new 30-unit UDP building that will open in August has already leased out all but seven of its units. Neely said it’s possible that if tenants there use the car frequently, they might need to purchase another.

“It would be a huge success if eventually we needed a small group of vehicles,” she said. “We care about the neighborhood and if we can think of a way to affect it positively, then our general answer is to do so.”

— The Real Estate Beat is a weekly column sponsored by real estate broker Lyudmila Leissler of Portlandia Home/Windermere Real Estate. Let Mila help you find the best bike-friendly home.


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Comments
  • Tessa May 23, 2014 at 11:27 am

    Interesting. At ATS last month Dennis Allen from Zidell Yards talked about trying to do this a couple of years ago and running into barriers with insurance. I wonder what’s changed here?

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    • Michael Andersen (News Editor) May 23, 2014 at 1:02 pm

      Indeed. I suspect Allen just hadn’t thought of using Getaround, or wasn’t aware of it. I didn’t think of it as a possible solution at the time.

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    • Oregon Mamacita May 25, 2014 at 9:43 am

      Insurance needs to be worked out. My car insurance will NOT cover renting my car out. And, if I rent to someone without car insurance,
      and they crash- it’s all over. Interesting- will the landord be the “deep pocket” when underinsured car owner rents to tenant who doesn’t have car insurance.

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  • Joseph E May 23, 2014 at 12:29 pm

    $5 an hour and $35 a day are great deals. The cheapest airport rentals are sometimes as little as $20 a day, but if you add insurance the cost quickly reaches $35 a day. If any of the new buildings in the Hollywood area want to add a car like this, I would love to use occasionally, as well.

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  • John Liu May 23, 2014 at 12:47 pm

    I appreciate seeing a developer going the extra mile like this. They sure didn’t have to do it, not with zero vacancy rate.

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    • SteveG May 23, 2014 at 1:32 pm

      Agreed. UDP was the first developer anywhere in Getaround’s service area to do this, and they have the scars to prove it!

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      • Michael Andersen (News Editor) May 23, 2014 at 2:43 pm

        Steve, do you know of other developers doing this with Getaround or Relay Rides in other cities? I don’t even know of any residential buildings that have dedicated Zipcars, but I assume there must be some.

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        • Bjorn May 25, 2014 at 8:30 am

          There is a building in Vancouver BC that was allowed to eliminate an entire floor of parking lot in exchange for providing something like 6 zip cars that were dedicated to be used only by residents. Gordon Price discussed it at his slideshow a couple years back. I can’t recall the name. It does seem that by allowing non residents to use the car too it might have an even larger impact on the total number of cars trying to park in the neighborhood.

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        • SteveG May 25, 2014 at 1:05 pm

          Michael-

          There’s a long tradition of apartment developers integrating car-sharing as an amenity, but they typically have outside services like Zipcar provide cars. Here’s an example from Switzerland’s “Mobility” carsharing service:

          https://www.mobility.ch/en/apartment-complexes/

          As far as I know, UDP is the first developer to buy their own car and put it into service specifically as a resident and neighbor amenity, to reduce overall parking demand.

          It’s worth noting that there are about a dozen Getaround cars along Division. UDP’s is the only one provided by a developer; the rest are provided by nearby residents who want to earn some money from their car when they’re not using it.

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        • Greg May 28, 2014 at 10:23 pm

          2121 Belmont used to have 2 Zipcars located in front of the building. They’ve since relocated to Morrison (behind the building), and a search on Zipcar shows only one car is stationed there now.
          Zipcar frequently moves cars around based on demand, so that could change.

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  • Sho May 23, 2014 at 12:53 pm

    Conveniently it also helps if they are going for LEED points due to the necessity for a car-share space required and if they own the car share program then they can control the space, since they have now reserved a space specific to their business and not alternates like zipcar. It’s kind of a sneaky to extend your property/development.

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    • Michael Andersen (News Editor) May 23, 2014 at 1:03 pm

      It’s an off-site amenity, so I don’t think they receive LEED points for this, though I could be wrong. They don’t receive any development credit from the city, though one would be available if they’d offered an on-site space for carsharing.

      As for whether it’s sneaky, UDP is paying the city for the space, as noted, so I’d argue that it’s less sneaky than every other car-owning household (including mine) that extends their own property by parking in the street for free.

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      • Sho May 23, 2014 at 10:33 pm

        Doesn’t have to be on site necessarily, its not like an electric car charging station but you could think of it more like a loading zone. The sneaky aspect is you now control what parks in front of your business which happens to be your own billboard. Never stated they weren’t paying for it just that it is now an owned spot by them.

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  • Art Fuldodger May 23, 2014 at 12:53 pm

    If the gas isn’t included, do you need to fill it up before return every time?

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    • SteveG May 23, 2014 at 1:30 pm

      Gas is not included. Users have to refill the tank at the end of every trip. Getaround is working on fixing this with a refueling solution similar to Zipcar’s. Once that’s in place and depending on the solution they come up with, the price of gas will likely either be incorporated into the hourly rate, or billed to the driver separately.

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  • Reza May 23, 2014 at 1:01 pm

    2/3 of the tenants have cars. Instead of passing along the savings of not building a garage to their tenants, these developers reap the profits and externalize the costs of building car storage to the rest of us, by taking advantage of free, subsidized on-street parking. They keep building these zero-parking apartments, and tenants are still showing up with cars. Why is that? Do we need a more robust transit or bicycle network? Would legalizing rideshare help?

    This token gesture does not somehow make things right.

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    • Reza May 23, 2014 at 1:03 pm

      The obvious thing I left out was managing on-street demand, but I thought that would go without saying.

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    • Michael Andersen (News Editor) May 23, 2014 at 1:17 pm

      I thought about this too, Reza, and I actually suspect that this model would work even better if the city began charging for parking in this high-demand neighborhood, as it probably ought to. That’d probably lead to less auto ownership by people in this area and increase the demand for this car and others like it, enough to cover the additional cost to the developer of paying for this street space. Hard to say for sure, though.

      Also, for what it’s worth: the developer isn’t turning a profit here, just breaking even, and it’d actually be illegal for them to turn a profit off this service. The terms of Getaround insurance, as I understand it, are that you can’t bring in more money than a shared car costs to maintain, because then you’d need special commercial insurance.

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    • SteveG May 23, 2014 at 1:28 pm

      Reza-

      The developer’s car is available to the general public, whereas personal, private cars are available only to one person. Yet personal, privately-owned cars pay nothing for storing their cars on the street, whereas UDP pays to park theirs.

      Think a bit more re. who’s getting the subsidy…

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      • GlowBoy May 23, 2014 at 3:13 pm

        I think Reza referring to the more general problem of developers putting up no-parking apartments whose tenants end up parking a lot of personal cars on the street, and not to UDP’s getaround rental, which of course is helping mitigate those problems.

        As to that larger problem, I would agree with others that on-street parking needs to start costing money on this stretch of Division (and neighboring streets), soon, or things will continue to get messier.

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      • davemess May 24, 2014 at 12:35 pm

        The developer.

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    • Chris I May 23, 2014 at 2:19 pm

      This problem exists because we under-charge for a public resource. If tenants had to pay to park their cars, fewer of them would own cars, and developers would be more likely to build off-street parking, because tenants would be more likely to demand it.

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    • ED May 23, 2014 at 6:11 pm

      Many individuals who live in single-family homes are also “reaping the profits” of not providing off-street parking for all of their vehicles. For the apartment, approximately 2/3s of residents park on the street without directly paying for it. What percentage of homeowners or renters do you think park on the street in the Division neighborhood? I used to live right off Clinton, and there were plenty of cars parked on the streets owned by people living in single-family homes or small multifamily units. Why should people living in these new apartments not be allowed to park their cars in a similar manner as existing neighborhood residents?

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      • 9watts May 23, 2014 at 7:46 pm

        “What percentage of homeowners or renters do you think park on the street in the Division neighborhood? ”

        I looked up a piece of this recently (2010 ACS). In the census tracts that border this section of Division (the Richmond neighborhood), the number of cars owned by owner-occupied residences is higher per household and per capita than the number owned by renters. I can’t say how many of them or what shares park off street, but, typically I believe in inner SE driveways and garages are less for car storage than is the public right of way.

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        • Oregon Mamacita May 25, 2014 at 9:40 am

          9 Watts, 75% of renters have cars according to a study by David Evans. Many of the older homes in Richmond have short driveways with bad feng shui for backing out. Having said that, I am in favor of the city asking “if you have a car, where does it live.” Thousand of car owners need to be told to park the car in their driveways. The streets are not for VW Van storage- you can park the VW micro van offsite at your own expense, IMHO.

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          • SteveG May 25, 2014 at 1:00 pm

            Mamacita-

            You raise a valid point: anyone using the public streets to park a private car should pay to rent that real estate. That’s equally true of people who have lived in a neighborhood for 3 generations and for people who moved in yesterday.

            After all, the ROW is public land, and although we’re all in the habit (myself included) of parking our private stuff there, making on-street parking free only encourages people to keep more cars, and park them on the street while leaving their own driveways empty. If I had to pay $50/month to park my car on the street, I would either be parking my seldom-driven car in my driveway, or I’d have sold it by now.

            And people who don’t have a driveway? They either would have to rent a driveway from a neighbor, or pay the city $50/month, or sell their car. As it stands, they’re getting a public subsidy (free storage) for their car.

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    • dsaxena May 24, 2014 at 1:25 pm

      Reza,

      It took me two years of living in NW PDX (21st) before i was ready to get rid of my car. This is a usual pattern with folks moving into dense urban areas….they will show up with their cars but will end up getting rid of them when it makes no sense to own them.

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      • davemess May 25, 2014 at 9:30 am

        NW 21st and Division and SE 38th, are not exactly on the same level of density or proximity yet though.

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      • spare_wheel May 25, 2014 at 7:08 pm

        when i lived on capitol hill in seattle i drove very infrequently so i would occasionally forget where i parked my car. since i would sometimes have to park 10-20 blocks away from my apartment, refinding it could be a real adventure.

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    • Randall Sewell May 26, 2014 at 9:02 am

      If it’s okay for everyone who already owns a house to store their car for free on the street, why shouldn’t it be okay for new people to do the same?

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  • Peter W May 23, 2014 at 2:32 pm

    Great idea, since it adds value to the neighborhood as well.

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  • GlowBoy May 23, 2014 at 3:18 pm

    Nice of UDP to have mounted bike racks on the Forester. Most conventional and Zipcar rentals lack the ability to transport bicycles with more than two adults (or with more than one child) in the car.

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  • Dwaine Dibbly May 23, 2014 at 5:35 pm

    It’s a creative solution. I hope it works out, but even if it doesn’t, I give UDP credit for trying something outside the box. If the car is indeed paying for itself, then this is an amenity that UDP can offer without any effect on the rent. It makes the units more desirable. Smart business move.

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  • Matthew Rogers May 23, 2014 at 8:57 pm

    Sounds like an awesome way to promote appropriately-sized mobility access for when the building residents need a car for whatever reason.

    I wonder how many automobiles the building (or group of buildings) would need to “control” such that, say, 90% of car/truck/van demand was covered by these shared vehicles?

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  • SteveG May 23, 2014 at 9:52 pm

    Matthew-

    Practically anyone can post a car, truck or van on Getaround and rent it out to their car-free neighbors. The car has to be in decent shape,with less than 150k miles and it must be no older than a ’95. UDP is the first developer to do this, but hundreds of individuals in Portland are also renting out their cars.

    My car earned me about $75 this week when it otherwise have just sat there. IMO this is a massively scaleable way to increase the city-wide supply of inexpensive shared cars.

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  • Matt May 24, 2014 at 5:26 pm

    *his tenants

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  • 007 May 26, 2014 at 12:19 pm

    AWESOME IDEA!

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